Ihs Holding Limited · NYSE:IHS
Ihs — Q1 2023 Earnings Presentation
31 slides from Ihs's earnings presentation, May 23, 2023
Slide 1: 1Q23 Earnings Results
1Q23 Earnings Results May 23, 2023
Slide 2: Disclaimer
DISCLAIMER Forward-Looking Information This presentation contains forward-looking statements. We intend such forward-looking statements to be covered by relevant safe harbor provisions for forward-looking statements (or their equivalent) of any applicable jurisdiction, including those contained in S
Slide 3: Presenting Today
PRESENTING TODAY SAM DARWISH STEVE HOWDEN COLBY SYNESAEL Chairman & CEO Executive Vice President & Executive Vice President of CFO Communications 3
Slide 4: IHS Growth Strategy
IHS GROWTH STRATEGY REVENUE In US$M 1,961 (2) 18 Revenue 1,580 (1) CAGR 2018 - 2022 1,403 24 1,168 1,231 +13.8% Organic Revenue • Capitalize on significant growth CAGR 2018 - 2022 opportunities in existing markets +15.2% • Optimize utilization of existing assets 2018 2019 2020 2021 2022 • Consolidat
Slide 5: 1Q23 Performance
1Q23 PERFORMANCE REVENUE In US$M 603 (2) 48 521 526 1Q23 Revenue (1) 18 Growth Y/Y 468 446 +35.1% • In 1Q23 we constructed 198 new 1Q23 Organic Revenue towers, added 397 new tenants, and Growth Y/Y as expected, rationalized 727 towers +38.0% occupied by our smallest key customer in Nigeria on which
Slide 6: IHS Group Snapshot
IHS GROUP SNAPSHOT 5th Largest Independent Multinational 39,104 (1) TowerCo Globally By Tower Count (1) 224,023 Towers on 3 Continents ~135,000 16,372 7,023 Nigeria Brazil ~41,500 39,428 39,104 5,691 2,698 South Africa Côte d’Ivoire 2,299 1,858 ~22,000 Cameroon Zambia 13,684 1,538 1,343 Kuwait Rwand
Slide 7: 1Q23 Highlights
1Q23 HIGHLIGHTS Nigeria South Africa • President-elect Bola Ahmed Tinubu expected to be sworn in as • IHS is the #1 independent TowerCo in South Africa Nigeria's next president on May 29, 2023 • Continue to evaluate our power Managed Services opportunity • As previously disclosed, during Q1 we upstr
Slide 8: Our Approach to Sustainability
OUR APPROACH TO SUSTAINABILITY SUSTAINABILITY INITIATIVES IN 1Q23 OUR STRATEGY Four-pillar Sustainability Strategy: Ethics and governance • Ethics and governance • IHS Cameroon sponsored a wellbeing session for 150 students and 23 • Environment and climate change teachers focusing on the negative ef
Slide 9: Consolidated Results Snapshot
CONSOLIDATED RESULTS SNAPSHOT 1Q22 1Q23 Y/Y Towers (#) 33,275 39,104 17.5% Tenants (#) 49,643 58,146 17.1% Colocation Rate 1.49x 1.49x (0.00x) Lease Amendments (#) 28,517 33,038 15.9% In US$M, unless stated Revenue 446 603 35.1% Adjusted EBITDA 245 335 37.0% Adjusted EBITDA Margin 54.9% 55.7% 80 Bps
Slide 10: 1Q23 Consolidated Revenue Walk
1Q23 CONSOLIDATED REVENUE WALK 1Q23 REVENUE In US$M +38.0% Growth +$156M or +35.1% 1Q23 Organic Revenue Growth Rate Y/Y Organic Growth +$170M or +38.0% 37 (50) • By Segment • Nigeria 46.6% 603 • SSA 15.6% 63 • Latam 18.4% • MENA 11.2% 5 23 20 7 5 15 33 446 +7.3% +3.4% +1.0% +1.5% +4.4% +5.1% +1.0% +
Slide 11: Consolidated Revenue and Adjusted EBITDA
CONSOLIDATED REVENUE AND ADJUSTED EBITDA REVENUE (1) Reported (1) Growth Y/Y +23.4% +16.4% +30.2% +26.6% +35.1% +35.1% Organic (1) Growth Y/Y +21.5% +9.9% +23.1% +23.5% +38.0% 1Q23 Revenue Growth Rate Y/Y In US$M 603 521 526 10 468 10 46 • 1Q23 revenue grew +35.1% Y/Y, of 446 42 9 44 122 9 43 9 (3)
Slide 12: Recurring Levered Free Cash Flow and Capex
RECURRING LEVERED FREE CASH FLOW AND CAPEX RECURRING LEVERED FREE CASH FLOW In US$M $150M 44.6% 35.6% 36.6% 35.7% 150 1Q23 Recurring Levered 33.3% (2) (2) 43 (2) Free Cash Flow (1) (2) 91 97 87 88 (1) 18 • 1Q23 RLFCF grew +71.9% Y/Y, and +22.6% Y/Y excluding $43M of non- recurring revenue in 1Q23 1Q
Slide 13: 1Q23 Segment Performance Highlights
1Q23 SEGMENT PERFORMANCE HIGHLIGHTS Revenue & Segment Adjusted EBITDA In US$M 1Q22 1Q23 Y/Y Towers 16,856 16,372 (2.9%) Tenants 25,690 25,650 (0.2%) Lease Amendments 27,743 31,460 13.4% Nigeria Revenue 321 425 32.5% Segment Adjusted EBITDA 203 272 33.9% Segment Adjusted EBITDA Margin % 63.3% 64.0% 7
Slide 14: Towers & Tenants
TOWERS & TENANTS TOWERS TOWERS BUILT In ‘000s 39.1 39.4 39.7 39.1 1.4 1.5 1.5 1.5 33.3 7.1 7.2 7.3 7.3 1.4 7.1 385 356 19 13.7 13.8 13.9 13.9 56 23 7.9 81 240 67 203 21 198 68 23 74 7 41 29 16.9 16.7 16.9 17.0 16.4 39 243 50 108 184 100 112 37 1Q22 2Q22 3Q22 4Q22 1Q23 1Q22 2Q22 3Q22 4Q22 1Q23 Nigeri
Slide 15: Debt and Other Matters
DEBT AND OTHER MATTERS As of December As of March In US$M 31, 2022 31, 2023 8.000% Senior Notes due 2027 940 940 3.1x Consolidated Net Leverage Ratio 5.625% Senior Notes due 2026 500 500 as of March 31, 2023 6.250% Senior Notes due 2028 500 500 • 9.4% weighted average cost of debt Nigeria (2019) ter
Slide 16: 2023 Guidance
2023 GUIDANCE Key Points • Revenue guidance: • Includes $48M of non-recurring revenue in 1Q23 as adjusted for withholding tax REITERATING 2023 GUIDANCE from our smallest key customer in Nigeria Metrics Current Range Range • Implies organic growth of ~23% (at the mid-point) or ~21% excluding the $48M
Slide 17: FX Overview
FX OVERVIEW 1Q23 REVENUE BY REPORTING CURRENCY (1) RWF KWD ZMW 2% ZAR 3% 5% 2% FX Rates Assumed in 2023 Guidance BRL 8% • 2023 average rates EUR (2) (2)(1) (2) 10% (2) • USD:NGN = 497 (2) (1) (2)(2) NGN • USD:BRL = 5.27 71% • USD:EUR = 0.92 • USD:ZMW = 20.61 • USD:RWF = 1,117 • USD:KWD = 0.31 • USD:
Slide 18: Appendix
Appendix MHS |
Slide 19: FX Resets Impact on Our Business
FX RESETS IMPACT ON OUR BUSINESS USD FX RESET FREQUENCY (1) Monthly 3% Semi-annually 3% FX Resets How FX resets work • A relevant portion of contracts is tied to a “hard currency” including USD and Euro • We are paid in local currency, but in certain countries, the absolute amount Quarterly adjusts
Slide 20: Oil Impact on Our Business
OIL IMPACT ON OUR BUSINESS POWER SOLUTION AS AT DECEMBER 31, 2022 (1) Grid / Solar / other 7% Oil Impact Grid connectivity and back up • For the last several years, IHS has Hybrid generator 42% added hybrid (solar/battery) powered 26% solutions. As part of our Carbon Reduction Roadmap, we expect to
Slide 21: 1Q23 Revenue Overview
1Q23 REVENUE OVERVIEW 1Q23 REVENUE BY KEY CUSTOMERS 1Q23 REVENUE BY SEGMENT 1% 1% 1% 1% <1% 2% 2% 3% 4% 8% 4% (1) 20% 11% 56% (1) 71% 17% MTN Airtel 9mobile Orange (1) TIM Zain Claro Vivo Oi (Fixed) Telkom Tigo Other Nigeria SSA Latam MENA Customer Credit Rating(2) America Telefonica MTN Airtel Oran
Slide 22: IHS Market Data
IHS MARKET DATA Towerco Towerco (1) Core # out of # Major Towers Market Market Tenants (4) MNOs (5) Position (2) Share (3) 1 Nigeria 16,372 60% 3 out of 4 1 South Africa 5,691 50% 2 out of 4 1 CIV 2,698 100% 3 out of 3 1 Cameroon 2,299 100% 2 out of 3 1 Zambia 1,858 100% 2 out of 3 Rwanda 1,343 1 99
Slide 23: Attractive Markets Well Suited for Organic Growth
ATTRACTIVE MARKETS WELL SUITED FOR ORGANIC GROWTH POPULATION (MILLION PEOPLE) DATA USAGE PER SIM (GB/MONTH) CAGR 2022 – 2027E CAGR 2022 – 2027E 1.4% 2.3% 18.7% 25.7% 838 782 10.8 6.7 248 221 4.6 2.1 2022 2027E 2022 2027E 2022 2027E 2022 2027E All IHS Markets (1) Nigeria All IHS Markets (2) Nigeria 4
Slide 24: Adjusted EBITDA Reconciliation
ADJUSTED EBITDA RECONCILIATION Reconciliation from profit/(loss) for the period to Adjusted EBITDA 3-month period ended (1) LTM as of LTM as of LTM as of Mar 31, Jun 30, Sep 30, Dec 31, Mar 31, Mar 31, Dec 31, Mar 31, 2022 2022 2022 2022 2023 2022 2022 2023 $'000 $'000 $'000 $'000 $'000 $'000 $'000
Slide 25: Adjusted EBITDA Reconciliation
ADJUSTED EBITDA RECONCILIATION Reconciliation from (loss)/profit for the period to Adjusted EBITDA 2018 2019 2020 2021 2022 $'000 $'000 $'000 $'000 $'000 Loss (132,770) (423,492) (322,682) (26,121) (470,397) Adjustments: Income tax expense 46,748 13,518 169,829 17,980 (73,453) (1) 315,942 288,915 63
Slide 26: Recurring Levered Free Cash Flow Reconciliation
RECURRING LEVERED FREE CASH FLOW RECONCILIATION Reconciliation of cash from operations for the period to Recurring 3-month period ended (1) Levered Free Cash Flow Mar 31, Jun 30, Sep 30, Dec 31, Mar 31, 2022 2022 2022 2022 2023 $'000 $'000 $'000 $'000 $'000 Cash from operations 166,607 216,800 294,1
Slide 27: Recurring Levered Free Cash Flow Reconciliation
RECURRING LEVERED FREE CASH FLOW RECONCILIATION Reconciliation of cash from operations for the period to Recurring Levered Free Cash Flow 2018 2019 2020 2021 2022 $'000 $'000 $'000 $'000 $'000 Cash from operations 554,940 660,025 656,699 788,073 966,874 Net movement in working capital 67,067 18,133
Slide 28: Currency Overview
CURRENCY OVERVIEW Average Period End Spot Currency FY21 1Q22 2Q22 3Q22 4Q22 1Q23 FY21 1Q22 2Q22 3Q22 4Q22 1Q23 Nigeria (Naira) – USD:NGN NAFEX 410 417 419 431 446 461 435 417 425 437 462 461 European Union (Euro) – USD:EUR 0.85 0.89 0.94 0.99 0.98 0.93 0.88 0.90 0.95 1.04 0.94 0.92 Zambia (Kwacha) –
Slide 29: Glossary of Terms
GLOSSARY OF TERMS Adjusted EBITDA: Profit/(loss) for the period, before income tax expense/(benefit), finance costs and income, depreciation and amortization, impairment of withholding tax receivables, business combination transaction costs, impairment of property, plant and equipment and related pr
Slide 30: Glossary of Terms
GLOSSARY OF TERMS Non-core Revenue: Non-core captures the impact of movements in foreign exchange rates on the translation of the results of our local operations from their local functional currency into U.S. dollars, which is measured by the difference in U.S. dollars between (i) revenue in local c
Slide 31: Towers of strength
Towers of strength ihstowers.com